If you are
obtaining a VA or FHA loan in order to finance your purchase, you must
include that information in your offer. This is because government loans
place additional financial and performance obligations on the seller.
Non-Allowable Fees
First, VA
and FHA loans prohibit buyers from paying certain types of fees that are
often charged by lenders, escrow companies, settlement agents, and title
companies. They are called "non-allowable" fees. They still get charged
anyway, but as the buyer, you are "not allowed" to pay them. The result is
that the seller ends up paying them instead of you.
Most of
these "non-allowable" fees come from your lender. By the time you are
making an offer you should have already been pre-qualified by a loan
officer, so you or your real estate agent can ask how much the lender’s
non-allowable fees will be. Experienced agents should also have an idea of
what non-allowable fees will be charged by the escrow or settlement agent
and the title insurance company.
Since these
are fees the seller would not pay on an offer with conventional financing,
this information must be included in your offer. You should also realize
that since the seller will be paying these additional fees, they may be a
little less negotiable on the price
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